Macpherson

Refrigeration
Case
Group D10
Case
Chart out plan to meet aggregate
demand over a period of time.
Possible alternatives to achieve so are
Level production
Hiring/Layoff of Operators
Overtime by Operators

Objective Function
Minimize the total costs involved.
Cost = Cost of Operators hired + Cost of
Operators fired + Cost of operators per
month + Cost of overtime operators +
Inventory Holding Cost

Data and facts
Regular Labour Cost 2400 per operator
per month
Overtime Labour Cost 3300 per overtime
operator per month
Inventory Holding Cost 8 per unit per
month
Hiring Costs 1800 per operator
Layoff costs 1200 per operator
Constraints
Actual Production <= Plant Capacity
Layoff in month < No of operators in
previous month
Positive Inventory
Assumed Constraints
Layoff per month < = 15
Hiring per month < = 30
Overtime operators <= 50% of actual
operators


Analysis and Justification
Need for assumed constraints
The first slide shows solution without
additional constraints
All Operators working overtime
Next slide shows solution with maximum
overtime constraints
High layoff and hiring rates
Hence assumed these additional
constraints